BUSINESS NEWS - Futuregrowth Asset Management is a firm one typically associates with fixed interest investments in companies and projects that have a role to play in national development and the transformation of South African society, including infrastructure, community property, renewable energy, agriculture and state-owned enterprises.
Which is why its most recent investment may come as a surprise to some in the market. It has acquired a sizeable stake in Symion, a commercial and industrial technology group, through its Development Equity Fund (yes, Futuregrowth also has a small – R2.5 billion – private equity fund).
The rise of interconnected devices and cyber-physical systems is changing the way cities, factories, buildings and infrastructure operate globally – and Africa is no exception, says Amrish Narrandes, a private equity analyst at Futuregrowth. “And we think that Symion provides a platform for intelligent infrastructure that can positively impact the lives of ordinary South Africans.”
He agrees that this investment may seem slightly different from other projects Futuregrowth has invested in previously, such as affordable housing and sustainable agriculture, but does not believe it deviates from the group philosophy of ‘doing good’.
Many of Symion’s products are focused on clean and efficient energy services and sustainable usage of existing resources as well as intelligent safety and security technologies, he says.
Narrandes is also wary of being accused of following trends for the sake of popularity. “I’m cautious about buzzwords like fintech, insuretech and technologies that allow you to ‘leapfrog’. We evaluate all our investments on first principles – an analysis of profitability, cash flow, management and growth opportunities in the sector. Based on these we think this is the type of investment that can help us generate alpha.”
The fund targets a return of CPI + 10%.
Symion was founded in 2016 by Rick Basson and has made two significant acquisitions since then, notably of the FS Group and Rubicon.
FS Group’s products and services allow customers to create safer working environments for their staff and customers. “A practical example is their CCTV systems that enhance security on university campuses, shopping malls or large-scale mines,” says Narrandes.
